Home loan requirements and eligibility
Eligibility requirements for a home loan
Preparation is key to an easy and seamless mortgage application. If you’re thinking of taking out a home loan, make sure you know the basics so you can submit your application without delays.
Who is eligible to apply for a mortgage?
The eligibility criteria for a mortgage vary depending on the lender. However, the basic eligibility requirements are the same across the board. If you’re applying for a home loan, you must be:
- At least 18 years old
- An Australian citizen or a permanent resident
Those who are not Australian citizens or permanent residents must be in a de facto relationship with or married to an Australian citizen or permanent resident.
Lenders will take into consideration a potential borrower’s financial situation when approving or rejecting a loan application. They will review your credit score, credit history, income, existing debts, and other important financial factors.
At loans.com.au, our lending specialists will be more than happy to assist you if you have any questions about eligibility requirements and if you meet our lending criteria.
What documents do you need for a house loan?
Before you start your home loan application, make sure you have all the needed documents ready. This will streamline your application and avoid lengthy delays.
Here’s a quick list of documents you need when applying for a mortgage:
Personal details
This includes a passport, driver’s licence, birth certification, citizenship certification, or other official documents with your personal information.
Property details
The lender will need some information about the property you’re looking to buy. This information can include but is not limited to the value of the property, where it is located (metropolitan, rural), the type of property (house, unit, townhouse, granny flat, studio apartment, tiny house), the age of the property, and how big the property is.
Note that you can still seek a home loan pre-approval without having chosen a property.
Proof of employment
Lenders look at a potential borrower’s employment status. They generally need the past three months of payslips along with your home loan application. If you are self-employed, you may not be able to supply these documents, and as such, will be required to provide other documents like your tax returns.
Income
Lenders may ask you to present documents relating to your income, including your gross annual salary, rental income, or any other additional income, as well as your savings habits, employment history and so on.
Assets and liabilities
Lenders will also consider your assets and liabilities, as well as your monthly expenses, to ensure you can manage to take on a mortgage. Assets could include any other properties and/or any cars or vehicles you own. Liabilities will also be included to ensure you can manage the additional expense of a mortgage. Existing loans (e.g., car loans, personal loans, and home loans) and credit cards.
The application process differs depending on the lender. Some may require more documentation than others, but those listed above are the most common requirements.
Some lenders may also require borrowers to send their documents and application forms in person. However, there are lenders like loans.com.au who prioritise convenience, letting borrowers apply for their home loans online!
No need to take precious time out of your busy day to visit an office. With loans.com.au, you can apply for a loan with just a click.
What kind of property can you buy with a mortgage?
You can use a mortgage to buy residential properties and investment properties. There are some home loans that can be used for certain instances. You can use a home loan for the following:
- Buying a home for the first time.
- Buying a home at an auction.
- Building a home from the ground up.
- Buying a new home while you’re in the process of selling your current one.
- Buying or building a green home.
- Buying an investment property.
- Building an investment property.
- Buying a residential property using your SMSF.
- Buying a commercial property using your SMSF.
- Buying a property in Australia as an Ex-Pat living abroad.
If you want to know more about your home loan options, get in touch with our friendly lending specialists today!
How much can you borrow on a home loan?
The amount you’re allowed to borrow depends on several factors such as your credit score, credit history, and financial situation. The lender will assess your financial capabilities and provide an amount that they think you’re able to repay.
Before applying for a loan, you may want to check your borrowing power using an online calculator to get an idea of how much you can borrow. These online calculators can only provide an estimate and are only based on the information you provide.
If you want a more concrete loan amount, you can apply for a pre-approved mortgage. When you apply for pre-approval, the lender will assess your application and provide you with a price range of how much they’ll willing to lend you. Although not a guarantee of approval, it’s a good gauge home buyers can use before they start house hunting.
Start your home loan journey with loans.com.au!
Want to learn more about your home loan options? Get in touch with us today by calling 13 10 90. Our friendly lending specialists will be more than happy to walk you through the process and discuss your finance options. Or you can apply for a home loan online!
Find out in under 2 minutes if you qualify for one of our low rate home loans.
About the article
As Australia's leading online lender, loans.com.au has been helping people into their dream homes and cars for more than 10 years. Our content is written and reviewed by experienced financial experts. The information we provide is general in nature and does not take into account your personal objectives or needs. If you'd like to chat to one of our lending specialists about a home or car loan, contact us on Live Chat or by calling 13 10 90.
